What happens if I refuse to use the appraisal clause in my claim?: Practical answers under North Carolina law
What happens if I refuse to use the appraisal clause in my claim? - North Carolina
Short Answer
In North Carolina, if your auto policy has an appraisal clause and the insurer properly demands appraisal, a court can require both sides to use it before any lawsuit moves forward. Appraisal is meant to resolve only the amount of loss (value), not coverage disputes. You can keep negotiating, but if you refuse after a valid demand, the insurer may ask a judge to pause any lawsuit and compel appraisal. Specific deadlines and steps come from your policy.
Understanding the Problem
You’re in North Carolina, you own the vehicle, and you’re disputing the insurer’s actual cash value offer after a collision. You want a faster resolution without hiring an umpire and prefer to avoid the policy’s appraisal clause while you negotiate.
Apply the Law
Under North Carolina law, appraisal provisions in first-party property policies are contractual tools to resolve valuation disputes. When properly invoked, appraisal determines the amount of loss, while courts remain available for coverage, fault, or bad-faith issues. If a lawsuit is filed, North Carolina’s court system often requires mediation, but courts can also pause a case and enforce a contractually agreed appraisal process first. Most timing, notice, and selection rules (your appraiser, the umpire, and inspection logistics) come directly from your policy’s clause.
Key Requirements
Valid appraisal clause and demand: The policy must contain an appraisal clause, and the party seeking appraisal must make a written demand consistent with the policy.
Amount-of-loss dispute only: Appraisal resolves the vehicle’s value or repair cost; it does not decide coverage, fault, or claim denials.
Timely cooperation: After a valid demand, each party typically must promptly name a qualified, impartial appraiser and participate in choosing an umpire as the clause directs.
Court enforcement and stay: If a party refuses, a North Carolina court can stay litigation and order compliance with the appraisal process before the case proceeds.
Policy-driven timelines: Your policy controls any deadlines to demand appraisal, name an appraiser, and complete the process; missing them can prejudice your claim.
Apply the Rule to the Facts: Here, your dispute is over actual cash value for a nearly new vehicle totaled one day after purchase. That’s a classic amount-of-loss issue an insurer may funnel to appraisal. You can keep negotiating to try to bridge the $2,500–$4,200 gap. But if the insurer makes a proper written demand under your policy and you refuse, a court can pause any lawsuit and require appraisal to set value before other issues proceed.
Process & Timing
Who files: The party seeking to enforce the clause (often the insurer). Where: Superior Court in the North Carolina county with proper venue (commonly where the loss occurred or where you reside). What: A motion to compel appraisal and to stay litigation; if no suit is filed yet, the parties typically proceed by written demand under the policy. When: Promptly after a valid written demand and refusal; policy deadlines to name an appraiser or proceed to an umpire can be short.
After a court order (or mutual agreement), each side selects an appraiser; the appraisers try to agree on an umpire. If they cannot, a court can be asked to appoint an umpire. Scheduling inspections and exchanging valuations often takes several weeks; counties differ in court scheduling.
The appraisers (or the umpire, if needed) issue a written award stating the amount of loss. The insurer then adjusts payment consistent with the policy’s coverage and limits. Coverage or bad-faith issues, if any, can be addressed after valuation.
Exceptions & Pitfalls
If the dispute is about coverage (for example, whether the loss is covered) rather than value, appraisal generally does not apply.
Failing to respond to a valid appraisal demand or missing policy deadlines can harm your claim and lead to a court order compelling appraisal.
Appraisal does not decide fault, diminished value claims outside the clause, or bad-faith allegations; those remain for negotiation, mediation, or court.
If your policy lacks an appraisal clause, you cannot be forced into appraisal, but court-ordered mediation will likely apply if you sue.
Conclusion
Refusing appraisal in North Carolina is possible while you negotiate, but once the insurer makes a proper written demand under a valid policy clause, a court can stay litigation and require appraisal to set the amount of loss. Appraisal resolves value only; coverage and bad-faith issues remain separate. Next step: review your policy’s appraisal clause and calendar any deadlines to name an appraiser so you can decide—before those deadlines—whether to proceed with appraisal or take a different legal path.
Talk to a Personal Injury Attorney
If you're dealing with a North Carolina auto property damage valuation dispute and want to avoid delays, our firm has experienced attorneys who can help you understand your options and timelines. Call us today.
Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.
